Blog Preparing For Tax SeasonNovember 01, 2023
As we approach the end of the year, the apprehension of preparing for tax season increases. In this article, we’ll share some year-end tips to streamline your tax preparation and potentially reduce your tax burden. These insights come from Glenn Fines, CPA, CGA, who has been a partner at Focus LLP since 2019.
1. Simplify Prescription Drug Costs
Instead of keeping a pile of prescription receipts, request a year-end printout from your pharmacy. This will ease your accountant’s work and ensure all drug expenses are accounted for accurately.
2. Obtain Childcare receipts
The childcare receipt would need to indicate the childcare provider’s name/business name and address, the child’s name as well as the amount paid and the period. If the childcare provider is an individual, the receipt would need to include the childcare provider’s SIN. This thorough receipt will save you and your accountant precious time during tax season.
3. Nanny Expenses
If you use a caregiver like a nanny, you may be their employer, necessitating tax deductions, CPP and EI payments, and potentially workplace insurance contributions, along with providing a T4 slip at year-end. Understanding these obligations before hiring can simplify your tax responsibilities.
4. “Work from home” expenses
To claim these expenses, the employee needs to ensure that their employment contract requires them to work from home and that they have a signed T2200 form from their employer. There was a simpler method during COVID, but unless people are still required to work from home due to COVID (which is unlikely now), this simple method may not be available. If it does still apply, then the employee needs a T2200S form signed by the employer. Then the employee has two options to claim expenses: a detailed method or a flat $2 per day up to $500.
By following these tips, you can make life easier for both you and your accountant and potentially uncover opportunities to optimize your tax situation. Be proactive in preparing for tax season, and you’ll reap the benefits in the form of reduced stress and potential tax savings.
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Authored by: Jason Nagel, Director of Advanced Planning at Three60 Wealth